The European Bank for Reconstruction and Development (EBRD) launched its first technical assistance FinTech project in Estonia, together with the country’s Ministry of Finance and Financial Services Authority.
The main goal is to create a supportive regulatory environment in order to make it easier for Estonian start-ups to innovate. One possible solutions is to build the country’s first regulatory sandbox, which will facilitate innovation and enable firms to test innovative financial products, financial services or business models with the result to bring such solutions to the market faster.
The EBRD-led project will allow the authorities to learn more about innovative businesses, while companies will be able to test new ideas with real customers utilising the dexterity and innovation that start-ups are renowned for in a controlled regulatory environment.
The benefits of sandboxes are plentiful. Start-up participants receive feedback on their business model, access to technical expertise and ongoing support from the testing team after they pass the eligibility criteria. Regulators see greater competition introduced to the market due to ease of access as well as reduced time and cost for implementing innovative technologies.
The following step will see a list of recommended reforms submitted to the Estonian government to ensure the implementation of new and innovative technologies in the country’s financial markets.